Is it safe to buy ReneSola stock as shares bounce back 2% ahead of earnings?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Dec 6, 2021
  • ReneSola shares on Monday advanced by more than 2%.
  • The stock plunged more than 23% last week.
  • The company report will report its FQ3 results Tuesday after markets close.

On Monday ReneSola Ltd (LON:SOLA) shares advanced by more than 2% to trim last week’s landslide losses. The stock plummeted by more than 23% in the previous five days after Grizzly Research issued a short call.

The firm forecasts 40% downside potential, saying ReneSola is drastically overrepresenting its project pipeline, also adding the legal difficulties facing its biggest shareholder could cause major issues for shareholders.

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ReneSola announced a $50 million share-buyback program on Monday in a bid to boost the stock price. As a result, the stock realised a marginal 2% rebound.

The authorization is effective immediately and has no expiry date. 

The stock has plummeted more than 82% since spiking by more than 162% at the start of the year. It now has a net year-to-date decline of about 58%.

Should you bet on ReneSola’s growth?

From an investment perspective, ReneSola shares trade at a reasonable forward P/E ratio of about 16.19, making it an attractive option for value investors.

Moreover, analysts expect its EPS to grow by more than 125% this year before rising by a further 51.64% next year.

Therefore, the stock could be an exciting option for growth investors.

Source – TradingView

Technically, ReneSola shares seem to be trading within a descending channel formation in the intraday chart.

As a result, the stock has plunged into oversold conditions, creating an opportunity to buy. 

Therefore, investors could target rebounds at about $6.30, or higher at $7.33, while $4.53 and $3.43 are crucial support zones.

In summary, although analysts still question ReneSola’s valuation of its pipeline, the recent pullback could trigger a technical rebound.

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